December 2011 ~ MEGHA CAPITAL'S Blog

Dec 25, 2011

NIFTY SPOT TECHNICAL CHART

(Click on the chart for bigger view)

Nifty spot closed at 4713 with heavy profit booking and all short term long positions winding up as short Christmas vacation is coming up. As indicated a chart of nifty daily from mid 2009, we can see volatility of nifty index. In 2011,

Dec 13, 2011

Excerpts of Letter of Warren Buffett to Shareholders, year 1978

Excerpts from Warren Buffett’s Letter to Shareholders for year 1978

....We make no attempt to predict how security markets will behave; successfully forecasting short term stock price movements is something we think neither we nor anyone else can do. In the longer run, however, we feel that many of our major

equity holdings are going to be worth considerably more money

than we paid…

…Slow capital turnover, coupled with low profit margins on sales, inevitably produces inadequate returns on capital

Dec 12, 2011

Excerpts of Letter of Warren Buffett to Shareholders, year 1977

Excerpts/Key Learnings from Warren Buffett’s Letter to Shareholders for year 1977:

The excerpts are taken from the letter and not changed with words or sentences. References are given as and wherever necessary.

…After all, even a totally dormant savings account will produce steadily rising interest earnings each year because of compounding.

…Except for special cases (for example, companies with unusual debt-equity ratios or those with important assets carried at unrealistic balance sheet values), we believe a more appropriate measure of managerial economic performance to be return on equity capital.

…The textile business again had a very poor year in 1977. We have mistakenly predicted better results in each of the last two years. This may say something about our forecasting abilities, the nature of the textile industry, or both.

Dec 10, 2011

Fake Exports Scam?: Black Money coming back to India by exports-over-invoicing with help of government

In a report dated 10 Oct 2011, Sanjeev Prasad, Sunita Baldawa and Amit Kumar of Kotak, unearthed the possible export-scam amounting to even more than combined 2G, mines and all other scams.

The report said that in between 2008-09 and 2010-11, exports to the Bahamas jumped to $2.2 billion from $2.2 million. Yet, India’s share in Bahamas’ imports, which totalled $2.8 billion in 2010, is a relatively minor 7.5 percent. Thus, this 1000 fold in 2 yrs is no-doubt an issue which demands criminal investigation.

According to UNCTAD —The global trade and investments monitoring agency of UN— says, the number in no way matches the data on the Bahamas’ global imports, which, was $2.8 billion in 2010. There are more reasons to smell scam in these figures. The 29-island Bahamas have an economy not larger than $8 billion and a population of only 3,50,000.

These and other skyrocketing increase in ‘copper articles’ exports points that some black money might have been repatriated back to the country via ‘over-invoiced’ exports (done by billing high fake amounts for overseas transactions with fake buyers or shell companies) given that international scrutiny is increasing over unaccounted funds in Swiss bank accounts and other financial centres.

It is clear that how India could continue achieving blistering rates of growth in exports (almost more than 50 percent each month) when the US and Europe, two top export destinations, are clearly in major financial trouble.

Indians’ per capita income rises 2.5 times in a decade

From year 2001-02’s Rs.18450, the per capita income of average investor risen to Rs.54000 in 2010-11. The per capital income calculated at current prices registered an annual average growth rate of about 12.80% during this time period.